NDP analyst Mat Piscatella recently spoke on the Virtual Economy Podcast where he affirmed that the increased price of next-gen games will be embraced by most of the players.
“For some of these premium games, if the $10 increase was implemented, people would happily pay it. They might grumble about it, but they would certainly pay it. The price sensitivity, particularly on day-one, suggests that.”
Piscatella says that the 10 USD increase in AAA games is something that is needed as prices have been staggered for the last fifteen years, even when the development costs have significantly increased.
“Game prices have stayed the same since 2005, when Call of Duty 2 first went to $59.99 on Xbox 360 and we’ve basically stayed there ever since,” he added. “Now, a lot of people will say a rise in base prices for the higher tier, premium games is needed to off-set development costs, inflation or whatever, and all those arguments seem to fall flat.”
Piscatella is not the only analyst or executive in the industry to talk about the sensitive but needed topic, Take-Two Interactive announced that NBA 2k21 would be a 70 USD title on PlayStation and Xbox. CEO Strauss Zelnick explains that the company will determine prices on a game-by-game basis.
Ubisoft, on the other hand, will not change the price of their upcoming games. CEO Yves Guillemot stated that “ for the $60 price we are really concentrating on the Christmas releases and we have decided that those games will be launched at $60″. Certainly, he suggests that next-gen games optimized for Xbox Series X/S and PS5 games will cost over 60 USD.
Former PlayStation Executive, Shay Laden has also explained how the current strategy of AAA design and 59.99 USD ahead of next-gen is “not sustainable”.
“Personally, as an older gamer… I would welcome a return to the 12 to 15 hour [AAA] game,” Layden remarked. “I would finish more games, first of all, and just like a well-edited piece of literature or a movie, looking at the discipline around that could give us tighter, more compelling content.”
“Going into the next generation, not only is that an important role in management… It’s also, perhaps, really evaluating what we can continue to put into games — at what cost can you continue to create these games?”
“It’s been $59.99 since I started in this business, but the cost of games have gone up ten times. If you don’t have elasticity on the price-point, but you have huge volatility on the cost line, the model becomes more difficult. I think this generation is going to see those two imperatives collide.”